2·4 measures reflection effect… Through remodeling-Maeil Economy

Apartment remodeling, which benefited from the’regulatory reflex effect’ after the current government strengthened private reconstruction regulations, is enjoying a greater reflection effect after the 2·4 real estate countermeasures. Not only did this measure not include any deregulation of private reconstruction regulations, but the market reaction to the’public-led maintenance project’, which Korea Land and Housing Corporation (LH) is promoting as a reconstruction operator, is cold. In addition, the renovation of the Enforcement Decree of the Housing Act on the 16th made it possible for the remodeling cooperative to have an online general meeting, which made it more advantageous to speed up the process.

According to the real estate industry on this day, apartment remodeling booms are happening regardless of Seoul, Gyeonggi and provinces. The Remodeling Promotion Committee for Mapo Taeyoung Apartment in Mapo-gu, Seoul, will receive a remodeling plan at the end of this month. Subsequently, it plans to ask for a consent form for the establishment of a cooperative, but if it is remodeled, the current 1992 households will be transformed into 2200 households.

Kolon Apartment (834 households) in Ichon-dong, Yongsan-gu, Seoul, has recently been selected as a remodeling design company and is starting to establish a cooperative. It is planned to create a large complex of about 2,100 households by integrating with the neighboring Gangchon Apartment (1001 households). The residents’ consent form will be received from April, and 70% of the respondents were found to agree in a survey conducted by the promotion committee. The nearby Hyundai Apartment in Ichon-dong will be reborn into 750 households after selecting Lotte E&C as the remodeling company last year. It is known that the Hangaram Apartment in Ichon-dong, a large complex of 2,000 households, is also holding a remodeling cooperative establishment general meeting at the end of May with resident consent rates.

Gyeonggi Province is also active, with more than 30 locations receiving approval to establish remodeling associations. In Daejeon, the first complex that promoted remodeling appeared. The Committee for Integrated Remodeling of Gukhwa Apartment in Dunsan-dong, Seo-gu, Daejeon recently announced a bid for a maintenance business specialist and architectural designer. Five nearby complexes will be integrated to have a total size of 2910 households.

As such, interest in remodeling has increased since the current government significantly strengthened regulations on private reconstruction. However, as this trend became stronger after the recent 2·4 measures, the number of complexes turned to remodeling increased.

In general, remodeling popularity and reconstruction popularity are inversely related. The more severe the reconstruction regulation, the more attention is paid to the relatively less regulated remodeling. Reconstruction requires more than 30 years of building the apartment, but remodeling takes more than 15 years. The safety diagnosis grade must also receive at least D grade (conditionally allowed) or lower for reconstruction, but only B grade (maintenance/repair) is required for remodeling. In addition, there is no extra profit return system, and you can buy and sell apartments after the association is established.

However, there is no plan to promote private reconstruction even in the second and fourth measures, and the reconstruction incentive is limited to the’public-led maintenance project’. The’regulatory merit’ of remodeling still remains. An industry insider said, “Although the 2·4 measures focus on supply, we have no choice but to focus more on remodeling as we have not released regulations on reconstruction.”

Although it can be reconstructed as a public-led maintenance project, there is a lot of opposition because it is a method of completely transferring ownership to the public. Even if the floor area ratio is increased, if the ratio of rentals is increased or the sale price is lowered, profitability decreases, and if the public recognizes less excess profit even if the reconstruction excess profit burden is not imposed, the members’ share will be smaller.

There is also a calculation that if the remodeling project is promoted quickly, it is advantageous to increase the value of apartment assets by blocking the source of concerns about the’public’. The problematic part of the 2·4 countermeasure is that houses purchased after February 4 are forced to be’cashed out’ when conducting public-led maintenance projects in the future. When buying a house, it was not a maintenance area, but if it becomes a public-led maintenance business area later, you will not receive an apartment and will be driven out for a lower price than the market price.

It is unlikely that there is a concern about the recent spread of “remodeling donations”. An official from Seoul said, “We are in the process of revising the standard for remodeling Seoul-style apartment houses, but it is not a content that requires rental housing,” he said. “It is only one of many incentives to secure publicity.”

According to the current operating standards for Seoul-style apartment remodeling, if publicity is secured by providing infrastructure (roads, parks, etc.) around the target site, green building design, nature-friendly spaces, and local shared facilities, within a certain range. The floor area ratio incentive is given. If major policies such as public support private rental housing and household-class housing are reflected, incentives are given up to 10% points from the existing exclusive area. Meanwhile, the renovation of the housing law enforcement decree on the 16th will allow the remodeling cooperative to hold an online general meeting, and it is expected that the project can be promoted to avoid the problem of delaying the general meeting due to corona19 concerns. However, the General Assembly of Redevelopment and Reconstruction is still subject to the provisions of direct attendance at the General Assembly due to the Urban and Residential Environment Improvement Act (province law), not the Housing Act.

[김태준 기자 / 이축복 기자]
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